The Gunners have been linked with a move for the Brazil international since Queens Park Rangers relegation to the Championship was confirmed back in April.
However, according to reports in Italy, Fiorentina are now leading the race to sign the 33 year old after Arsenal withdrew their interest in the last twenty-four hours.
Cesar had also been linked with a move to Napoli and Villareal though the pair declined to pursue a deal following concerns over the players wage demands.
Arsene Wenger is now back at square one in his search for a new shot stopper, with a whole host of other keepers linked with a move to the Emirates either securing moves elsewhere or deciding to stay with their current clubs.
Liverpool’s Pepe Reina has moved to Napoli on a season long loan, Sporting Lisbon’s Rui Patricio looks set to join Monaco and Asmir Begovic and Victor Valdes have opted to remain at Stoke City and Barcelona respectively.